Quick Bite | The Significance of China’s Economy

China’s economic activity has been severely suppressed over the past few years, as the government has continued its commitment towards its net-zero COVID policy. 

As of last week, positive signals emerged that China’s economy will once again start to reopen as it gradually eases its COVID restrictions. 

This has significant implications for global economic activity, especially Australia, as China represents 30-40% of global demand for goods such as raw materials, semiconductors, cars, and jewellery. 

This supports Clime’s view that Australian mining leaders remain well placed over the next 12 months, as Chinese demand likely rebounds, coupled with the globes ongoing commitment towards achieving its ambitious net-zero carbon emission goals.

The key risk to this view is that global geopolitical tensions remain elevated and could escalate further. Ultimately, this could result in a decoupling and multinationals losing access to the Chinese market.  

China is not only the world’s factory, it’s also a huge market of 1.4 billion consumers. 

Source: The Economist Intelligence Unit | Agathe Demarais

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